House approves bailout planPosted: Updated:
WASHINGTON - Congress has passed complex and highly criticized legislation authorizing $700 billion in government money to shore up the nation's stressed financial industry.
The 263-171 vote by the House sends the Senate-passed version to the White House for President Bush's signature. Among many features, the measure would allow the Treasury Department to buy up bad debt from various lending institutions.
Many members of the House voted for the bill even though some said it was not very attractive to them and to their constituents back home.
The measure had been defeated in the same chamber on Monday, sending stocks on Wall Street into a record slide. Announcement of the vote was greeted by applause.
The new plan includes $100 billion in tax breaks, plus a provision to raise the cap on federal deposit insurance from $100,000 to $250,000. The bill, like the first one that failed, would still allow the government to spend billions of dollars to buy bad mortgage-related securities and other debts.
Proponents of the plan say the government could sell the bad debts later at a higher price, lowering the taxpayers' final cost.
The tax cuts in the measure include a plan to extend the suspension of the Alternative Minimum Tax, in effect keeping the tax from hitting an estimated 20 million middle-income Americans for one more year. The measure would also provide $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.
The plan also includes energy and business tax breaks.
(Copyright 2008 by The Associated Press. All Rights Reserved.)